Options Bulls Tune In as FIT Scores Fresh Annual High

Calls are being picked up at their fastest rate in the last 12 months

Assistant Editor
Nov 23, 2020 at 2:00 PM
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The shares of Fitbit Inc (NYSE:FIT) are up 0.8% at a fresh annual high of $7.20 at last check. Prior to today's pop, FIT had been fighting overhead pressure at the $7.10 mark over the past couple of weeks, with newfound support coming from the 20-day moving average. Year-to-date, the equity is up 9.6%.

FIT2 Nov 23

The recent highs have options bulls coming out in full force, with 39,000 calls across the tape already today -- six times what's typically seen at this point. The monthly January 8 and 7 calls are the most popular, respectively, with plenty of traders betting on more upside for FIT.

This penchant for calls isn't unusual, though volume is particularly high. The stock's 50-day call/put volume ratio of 10.85 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) sits higher than all other readings in the past 12 months -- indicating that long calls have been picked up at their fastest rate all year.

However, some of this call volume could be shorts hedging against further upside, as short interest makes up a whopping 24.1% of the security's available float, and would take over two weeks to buy back at FIT's average pace of trading. In other words, there is plenty of pessimism that could unwind, and act as a tailwind for Fitbit stock. 

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